Tata Consultancy Services (NSE:TCS) Beneish M-Score : -1.63 (As of Apr. 28, 2024)

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What is Tata Consultancy Services Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Warning Sign:

Beneish M-Score -1.63 higher than -1.78, which implies that the company might have manipulated its financial results.

The historical rank and industry rank for Tata Consultancy Services's Beneish M-Score or its related term are showing as below:

NSE:TCS' s Beneish M-Score Range Over the Past 10 Years
Min: -2.74 Med: -2.46 Max: -1.63
Current: -1.63

During the past 13 years, the highest Beneish M-Score of Tata Consultancy Services was -1.63. The lowest was -2.74. And the median was -2.46.

Tata Consultancy Services Beneish M-Score Historical Data

The historical data trend for Tata Consultancy Services's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Tata Consultancy Services Beneish M-Score Chart

Tata Consultancy Services Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

Beneish M-Score

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-2.56

-2.74

-2.46

-2.23

-1.63

Tata Consultancy Services Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.23	-2.20	-2.14	-1.78	-1.63

Competitive Comparison of Tata Consultancy Services's Beneish M-Score

For the Information Technology Services subindustry, Tata Consultancy Services's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Tata Consultancy Services's Beneish M-Score Distribution in the Software Industry

For the Software industry and Technology sector, Tata Consultancy Services's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Tata Consultancy Services's Beneish M-Score falls into.

Tata Consultancy Services Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Tata Consultancy Services for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.8914

0.528 * 1.0574

0.404 * 1.0058

0.892 * 1.0685

0.115 * 0.9942

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.3965

4.679 * 0.163245

0.327 * 1.0373

-1.63

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was ₹540,680 Mil.
Revenue was 612370 + 605830 + 596920 + 593810 = ₹2,408,930 Mil.
Gross Profit was 245380 + 246880 + 241070 + 237270 = ₹970,600 Mil.
Total Current Assets was ₹1,129,840 Mil.
Total Assets was ₹1,464,490 Mil.
Property, Plant and Equipment(Net PPE) was ₹188,260 Mil.
Depreciation, Depletion and Amortization(DDA) was ₹49,850 Mil.
Selling, General, & Admin. Expense(SGA) was ₹99,910 Mil.
Total Current Liabilities was ₹461,040 Mil.
Long-Term Debt & Capital Lease Obligation was ₹65,160 Mil.
Net Income was 124340 + 110580 + 113420 + 110740 = ₹459,080 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = ₹0 Mil.
Cash Flow from Operations was 0 + 0 + 114310 + 105700 = ₹220,010 Mil.

Total Receivables was ₹567,690 Mil.
Revenue was 591620 + 582290 + 553090 + 527580 = ₹2,254,580 Mil.
Gross Profit was 248550 + 251190 + 238670 + 222140 = ₹960,550 Mil.
Total Current Assets was ₹1,102,700 Mil.
Total Assets was ₹1,436,510 Mil.
Property, Plant and Equipment(Net PPE) was ₹191,050 Mil.
Depreciation, Depletion and Amortization(DDA) was ₹50,220 Mil.
Selling, General, & Admin. Expense(SGA) was ₹235,830 Mil.
Total Current Liabilities was ₹435,580 Mil.
Long-Term Debt & Capital Lease Obligation was ₹62,030 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI	=	(Receivables_t / Revenue_t)	/	(Receivables_t-1 / Revenue_t-1)
	=	(540680 / 2408930)	/	(567690 / 2254580)
	=	0.224448	/	0.251794
	=	0.8914

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI	=	GrossMargin_t-1	/	GrossMargin_t
	=	(GrossProfit_t-1 / Revenue_t-1)	/	(GrossProfit_t / Revenue_t)
	=	(960550 / 2254580)	/	(970600 / 2408930)
	=	0.426044	/	0.402917
	=	1.0574

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (1129840 + 188260) / 1464490)	/	(1 - (1102700 + 191050) / 1436510)
	=	0.09996	/	0.09938
	=	1.0058

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI	=	Sales_t	/	Sales_t-1
	=	Revenue_t	/	Revenue_t-1
	=	2408930	/	2254580
	=	1.0685

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI	=	(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))	/	(Depreciation_t / (Depreciaton_t + PPE_t))
	=	(50220 / (50220 + 191050))	/	(49850 / (49850 + 188260))
	=	0.208149	/	0.209357
	=	0.9942

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI	=	(SGA_t / Sales_t)	/	(SGA_t-1 /Sales_t-1)
	=	(99910 / 2408930)	/	(235830 / 2254580)
	=	0.041475	/	0.1046
	=	0.3965

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((65160 + 461040) / 1464490)	/	((62030 + 435580) / 1436510)
	=	0.359306	/	0.346402
	=	1.0373

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA	=	(IncomefromContinuingOperations_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(NetIncome_t - NonOperatingIncome_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(459080 - 0	-	220010)	/	1464490
	=	0.163245

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Tata Consultancy Services has a M-score of -1.63 signals that the company is likely to be a manipulator.

Tata Consultancy Services Beneish M-Score Related Terms

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Tata Consultancy Services (NSE:TCS) Business Description

Industry

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532540:India

Address

Raveline Street, TCS House, Fort, Mumbai, MH, IND, 400001

Website

http://www.tcs.com

Tata Consultancy Services is a leading global IT services provider, with nearly 450,000 employees. Based in Mumbai, the India IT services firm leverages its offshore outsourcing model to derive half of its revenue from North America. The company offers traditional IT services offerings: consulting, managed services, and cloud infrastructure services as well as business process outsourcing as a service, or BPaaS.